Celsius Network Lost $54 Million in BadgerDao Hack
Last week, a hack on the high yield protocol BadgerDao led to the loss of $115 million worth of digital assets.
More information from on-chain data has revealed that Celsius Network lost $54 million worth of Bitcoin during the hack. Hackers extracted 896 Wrapped BTC from a MetaMask wallet used by Celsius Network to interact with the BadgerDao website.
Celsius Lost $54 Million to the Hack
This new information has led to questions and concerns from the crypto community as many wonder why Celsius Network will be using MetaMask for client funds. While the network has admitted to losing some money, it is yet to say how much it lost and hasn’t provided any information on how it plans to get back the money or who will absorb the losses.
This hack further compounds Celsius’s woes as it’s currently battling various issues. Those issues include its Chief Finance Officer, Yaron Shalem, arrest on criminal charges, failure to inform investors about the arrest before it closed its latest funding round, cease and desist orders from several state regulators, and concerns from users about its Ponzi-like qualities and difficulties in making withdrawals.
BadgerDAO’s Effort to Retrieve the Stolen Funds
With this hack, the risks of high-yield Defi platforms have become more pronounced. BadgerDao claimed that it’s working with Chainalysis and law enforcement authorities to track and retrieve the stolen funds. Celsius Network also stated that it’s assisting BadgerDao to resolve the issue and return the funds.
.@CelsiusNetwork has traced the attacker and reported this information back to Badger, to assist with the investigation. We have also incorporated the lessons learned into preventative security and DeFi interaction practices. (3/5)
— Celsius (@CelsiusNetwork) December 3, 2021
The hackers exploited the web interface that connects the BadgerDao website to users’ wallets, with the interface directing users to send their tokens to wallets controlled by the hackers. Nexus Mutual, the insurance company used by BadgerDao, has also refused to compensate BadgerDao and Celsius users, claiming its insurance policy doesn’t cover front-end hacks.
According to Celsius Network CEO Alex Mashinsky, the company will give an official statement on Friday.
This hack highlights the prevalence of financial crimes through security breaches on the Defi platforms. An Elliptic report stated that Defi users have lost over $12 billion to hackers between January 1, 2020, and November 9, 2021.